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Subcontracting or co-contracting of a public contract

Verified 14 May 2020 - Directorate for Legal and Administrative Information (Prime Minister)

Several companies may respond to a contract notice. Subcontracting is when one contractor entrusts to another the performance of a part of the services and co-contracting is when several providers pool their professional, technical and financial resources.

Subcontracting

  • For a service contract, subcontracting is entirely possible.
  • For a works contract, subcontracting is entirely possible.
  • In the case of a supply contract, it is possible only if it involves services or siting or installation work. Example: A company that provides ready-mixed concrete or pavers.

Only the contract holder has a contractual relationship with the buyer.

He shall be responsible for the proper performance of the contract. The subcontractor shall be accountable only to the contract holder or, in certain cases, to the contracting authority.

FYI  

a subsidiary of a business is considered to be a subcontractor, which is not the case for a branch or management.

The application for approval may be submitted by the applicant or by the holder either at the time or after the submission of the tender.

At the time of the offer

The application shall contain the following elements:

  • Nature of subcontracted services
  • Name and address of proposed subcontractor
  • Maximum amount to be paid to the subcontractor
  • Foreseen payment terms, including price variation criteria
  • Subcontractor capabilities
  • Declaration by the subcontractor that he is not subject to a ban on access to public contracts
  • Presentation of the professional, technical and financial capabilities of the subcontractor.

The buyer must accept the subcontractor and its payment terms.

If the buyer refuses the subcontractor, he must give reasons for his decision.

The notification acceptance of the subcontractor and approval of the conditions of payment laid down.

After submission of the tender

The holder must file a return containing the following information:

  • Nature of subcontracted services
  • Name and address of proposed subcontractor
  • Maximum amount to be paid to the subcontractor
  • Foreseen payment terms, including price variation criteria
  • Subcontractor capabilities
  • Declaration by the subcontractor that he is not subject to a ban on access to public contracts
  • Presentation of the professional, technical and financial capabilities of the subcontractor.

The acceptance of the subcontractor and the approval of its payment terms must then be the subject of a special act signed by the two parties. This act shall include all the information mentioned in the request of the contract holder.

The buyer's silence for more than 21 days after receipt of the requests constitutes acceptance by the subcontractor.

Warning  

if the subcontract is at least €5,000 HT, the subcontractor must provide every 6 months, a attestation of vigilance to the contract holder. This certificate makes it possible to check that he complies with his reporting obligations (declarations of activity and employment) and that he pays his social contributions and contributions.

There is no direct contractual relationship between the buyer and the subcontractor, but direct payment is still possible, subject to exceptions, to facilitate faster settlement.

The subcontractor is paid directly when the contract amount is equal to or greater than €600 TTC.

In the case of a contract awarded by the defense services, direct payment is possible if the amount of the subcontract is equal to or greater than 10% the total amount of the contract.

If a advance shall be paid to the contract holder, the buyer shall deduct the amount thereof and pay the sum directly to the subcontractor.

The subcontractor's right to an advance payment shall be opened as soon as the public contract is notified or the special act is signed.

Online

The subcontractor can submit his payment request on Chorus-Pro

Chorus Pro Portal

The holder has 15 days to accept or refuse direct payment.

By mail or on site

The invoice must first be sent to the holder and sent by registered letter with acknowledgement of receipt (RRA) or deposited against receipt.

The holder has 15 days to accept or refuse direct payment.

Then, the invoice must be sent to the buyer with a copy of the acknowledgement of receipt from the holder.

When the buyer has paid the invoice of the subcontractor, he shall inform the contract holder accordingly.

Co-contracting

Co-contracting is when several economic operators choose to respond to a public contract in a group to pool their professional, technical and financial resources.

This grouping of operators is temporary and only exists for a defined duration.

Unlike subcontracting, all members of the group have a contractual relationship with the buyer and are liable to him.

The group can take 2 different forms:

In a joint and several grouping, each member shall be financially responsible for the whole contract and for its performance, even if it carries out only part of it.

In a joint grouping, each member shall be responsible only for the part of the benefits for which he is responsible.

Applications and tenders shall be submitted either by all the members of the grouping or by representative.

The members of the grouping may empower the authorized representative to complete the application and/or the tender. They can authorize it through the application letter (DC1 or DUME) or by delegation of specific powers attached to the application.

One of the members must be appointed as soon as the application is written to represent the others to the buyer and to coordinate the services.

The form of grouping may be imposed on the holder of a contract, provided that the buyer has provided for this in consultation documents. The form imposed must be necessary for the proper performance of the contract. Otherwise, the form of the grouping is freely chosen by the members.

The application dossier for a grouping must contain the following:

  • Application letter which indicates the nature of the grouping (joint and several or joint), the contact details of all the members of the grouping and identifies the representative by detailing the powers delegated to him (DC1 or DUME)
  • Declaration by the applicant who gathers information on the legal form of the business, the identity of the persons authorized to hire it and the turnover of the last 3 financial years for each member of the grouping (DC2 or DUME)
  • If the buyer so provides in the consultation documents, the undertaking (ATTRI1 ex-DC3) must be used before the end of the procedure to formalize the contract or the framework agreement concluded.

Please note

In the case of a group of persons forming a joint and several partnership, the general administrative terms and conditions (GACC) may provide for the opening of a single account specifically opened for the group. If the benefits of each are clearly identified, it is possible to provide for payment to separate accounts.

FAQ